Cancelled Mergers Were Rarer in 2012

Fewer mergers and acquisitions were called off or outbid in 2012 as companies stepped up their dealmaking at the end of this year, according to data from Standard & Poor’s Capital IQ.

The number of deals where the target, buyer or seller was located in the U.S. that fell through in 2012 sank nearly 20% to 752, down from 939 collapsed deals in 2011, according to Capital IQ. As a percentage of total deals announced each year, about 4% of deals collapsed in 2012, compared to 5% in 2011.

Mega deals were also less likely to be cancelled this year. Most deals that were cancelled in 2012 were under $3 billion, according to Capital IQ. The only deal to fall through above that figure was the May cancellation of Coty Inc.’s $10.7 billion offer for cosmetics seller Avon Products Inc.

In 2011, however, several mega deals didn’t come to fruition. Big deals announced in 2011 that were eventually called off included the potential $5 billion pipeline tie-up of Southern Union and Williams Co. after Williams was outbid, the$4.8 billion hostile bid by Martin Marietta for Vulcan Materials Co., and Deutsche Boerse’s $17 billion bid for the New York Stock Exchange that failed to satisfy European regulators.

Of course, a collapsed deal doesn’t mean merger talks are over. NYSE is now back in the acquisition pool with plans to sell itself to rival IntercontinentalExchange for $8 billion. And Deal Journal noted in September that Martin Marietta is now free to resume its bid for Vulcan, though it has been silent on any plans to do so.

Only about 1% to 2% of deals are announced and cancelled within the same year, Capital IQ said.

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